STAND. COM. REP. NO. 3221

Honolulu, Hawaii

RE: S.B. No. 3007

S.D. 2

Honorable Ronald D. Kouchi

President of the Senate

Thirtieth State Legislature

Regular Session of 2020

State of Hawaii

Sir:

Your Committee on Ways and Means, to which was referred S.B. No. 3007, S.D. 1, entitled:

"A BILL FOR AN ACT RELATING TO TAX CREDITS,"

begs leave to report as follows:

The purpose and intent of this measure is to establish transparency with regard to which entities benefit from state tax credits.

Specifically, the measure requires the Department of Business, Economic Development, and Tourism to make public disclosures identifying:

(1) The names of taxpayers receiving tax credits relating to motion picture, digital media, and film production; research activities; and state enterprise zones; and

(2) The total amount of the tax credit received by each of those taxpayers.

Your Committee received written comments in support of this measure from two individuals.

Your Committee received written comments on this measure from the Department of Taxation; Department of Business, Economic Development, and Tourism; and Tax Foundation of Hawaii.

Your Committee finds that the tax credits that fall within the scope of this measure divert a significant amount of revenue that would otherwise go to the general fund and are thus effectively subsidized by taxpayers. Your Committee therefore believes that taxpayers and the general public have the right to know which entities are receiving the tax credits and how much of the tax credits those entities are receiving.

Your Committee has amended this measure by changing the effective date to July 1, 2050, to facilitate further discussion on the measure.

As affirmed by the record of votes of the members of your Committee on Ways and Means that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 3007, S.D. 1, as amended herein, and recommends that it pass Third Reading in the form attached hereto as S.B. No. 3007, S.D. 2.

Respectfully submitted on behalf of the members of the Committee on Ways and Means,

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DONOVAN M. DELA CRUZ, Chair